In short, Payment Services Directive enables bank customers, both consumers and businesses, to use Third-party providers to manage their finances. In the near future, you may be using Facebook or Google to pay your bills, making P2Ppayment Transactions and analyse your spending, while still having your money safely placed in your current bank account. Bank, however, are obligated to provide these Third-party providers access to their customers’ accounts through open APIs. This will enable third-parties to build financial services on top of banks’ data and infrastructure.

Banks will no longer only be competing against banks, but everyone offering financial services]. PSD2 will fundamentally change the Payment Transactions value chain, what business models are profitable, and customer expectations. Through the Payment Services Directive, the European Commission aims to improve innovation, reinforce consumer protection and improve the security of internet payments and account access within the European Union and European Economic Area.

Payment Services Directive describes the following types of players within Payment Transaction landscape:

First, third-party access to customer data must be given only at the explicit consent of the customer. It is the responsibility of the third-party provider to ask for specific scoped access (i.e., read only access to account transactions) on behalf of the customer.

Second, PSD2 mandates that data not be used, accessed or stored for any purpose other than the service the user explicitly requested. These requirements are similar to requirements under the General Data Protection Regulation (GDPR), but are given an additional legal basis by being in PSD2.